A Morgan Stanley unit was accused by Massachusetts officials of forcing its financial advisers into high-pressure sales contests to cross-sell so-called securities-based loans and other products to clients.

The accusation on Monday against Morgan Stanley Smith Barney LLC, the New York-based bank's retail brokerage, increases the scrutiny on an industry tactic that has recently backfired for others including Wells Fargo, which agreed last month to pay $185 million after federal and local authorities found the firm's cross-selling culture helped push employees to open unauthorized accounts.

In an administrative complaint, Massachusetts Secretary of the Commonwealth William Galvin accused the Morgan Stanley unit of "dishonest and unethical conduct" within the state and Rhode Island.

"The sales contest created a material conflict of interest which violated the firm's fiduciary duty to clients in pursuit of brokerage customers opening banking and lending accounts," Galvin said in the filing.

Jim Wiggins, a Morgan Stanley spokesman, said the company objects to the allegations and intends to defend itself "vigorously." Clients pay no fee to open a securities-based loan account and are charged only if they choose to borrow money, Wiggins said in an e-mailed statement.

"The securities-based loan accounts were opened only after discussing the product with each client and obtaining their affirmative consent," Wiggins said. "These accounts are valuable to clients providing access to low-cost liquidity whenever they choose to access it."

Participants were rewarded with incentives from $1,000 for 10 loans to $5,000 for 30 loans, and their performance was closely tracked, Galvin said in the statement. The contest helped triple the number of securities-based loans from the year before the contest started and generate almost $24 million in new balances.

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